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The euro starts the week in decline, it goes down again below 107 lek

Politiko 2023-09-11 14:14:41

The euro started this week falling in the exchange rate with the Lek. According to data from the Bank of Albania, the Euro dropped below the level of 107 ALL for the first time since August 23. The European currency was exchanged at 106.87 ALL, down 0.45 ALL since the end of last week. Compared to August 25, when it reached the highest level of the last three months, the Euro-Lek exchange rate has fallen by 3.71 points.

Foreign exchange agents say that the supply of the European currency continues to be abundant, while the demand for it has gradually faded, after a strong jump in the latter part of August. Experts believe that the increase in demand was temporary and probably many economic agents have made purchases in advance, even for the autumn period.

Such behavior can be explained by the expectation of a gradual strengthening of the Euro after September. However, such a thing has not happened. If many entities have met short-term foreign exchange needs as early as August, it may be understandable that demand has gradually declined over the past two weeks.

On the other hand, foreign exchange flows remain high, although the peak of the summer season has passed. Experts note that in recent years the summer season has been significantly extended in time and is less concentrated only in the July-August period.

Now, the effects of tourism on the foreign exchange are showing up significantly even in the months of June and September. Indirectly, this is also confirmed by the evaluations of the tourist operators, who have witnessed a high utilization of the hotel capacities even in the month of September.

Such a situation has caused the strong growth of the Euro at the end of August to "deflate" gradually.

Other major currencies also started the week in decline. The American dollar dropped below the limit of 100 Lek and was exchanged for 99.68 Lek. Even the British Pound dropped for the first time in three weeks below the level of 125 Lek, being exchanged at 124.85 Lek.

The strong lek in the exchange rate is playing an important role in limiting inflationary pressures from abroad. Also, the strengthening of the local currency against the Euro has had a positive impact on the budgets of families and entities that have loans in the European currency and income in Lek. The appreciation of the Lek has neutralized the significant increase in the interest rates of loans with variable interest in Euro.

However, the strengthening of the Lek is producing negative effects for the exporting sectors and especially for those of fashion. In an analysis they published at the beginning of this month, exporters estimated losses in the value of approximately 35 million euros from the appreciation of the Lek for the first 6 months of this year./Monitor